Accepting online payments are the key for creating a smooth sales process for your e-commerce website. If you create an easy and painless payment processing your potential customers will have positive experiences with your site. This happens when your store accepts a variety of payments, including credit cards, and flawless payment processing.

Depending on the type and variety of your product offerings you will need to set up a secured credit card payment processing that satisfies your customers and fits with your budget. I will review 2 online payment methods and 3 affordable processing services that are worth researching for your small internet business.

Two Methods for Accepting Online Payments

One way to accept credit card payments on your ecommerce website is through a merchant account. If you are just starting out, however, the costs of opening up a merchant account are fairly high. There are set-up and monthly fees, transaction charges and other charges. You have to pay minimum charges even if your business is not bringing in the money you had hoped for.

A good alternative is using a third-party merchant or a payment gateway. These processing services accept credit card payments online on your behalf in exchange for certain fees and charges. They charge a small setup fee and a per-transaction fee, which apply to all the sales that you make. A payment gateway has lower set up fees and higher transaction costs than a merchant account.

Three Online Payment Processing Services

1. Paypal. A PayPal account does not require a contract, is free to set up and does not require approval process to get started. PayPal allows merchants to accept payments from customers either from their PayPal funds or credit cards. If you sell digital products, you will be able to create an automatic product delivery by sending a customer directly to the download page.

PayPal takes a percentage of every sale paid through them. You are charged a small percentage transaction fee to receive payments, which is also the case with internet merchant accounts. The difference between the two is that online merchant accounts charge setup fees.

2. Clickbank. is another payment processor with no merchant account that specializes in downloadable products. It allows you to set up an affiliate program and they pay your affiliates for you. They allow payment from PayPal, making the payment options more varied for customers and affiliates.

ClickBank charges a one-time $49.95 activation charge. There is a $2.50 pay period processing charge for every payment that ClickBank issues to you. Each time you sell a product through ClickBank, they keep 7.5% plus $1. Keep in mind that there are also charges for revoked sales and dormant accounts.

3. 2Checkout (2CO). 2CO is an online credit card processor that doesn’t require you a merchant account to sell online. In addition to accepting all kind of credit cards it is also able to be “plugged into” many shopping cart scripts for use on your website.

2CO has a simpler fee structure than the other online payment processors. There is $49 one-time application fee per account. Each time you sell a product through 2Checkout they keep 5.5% and $0.45. They also don’t charge a monthly or yearly membership fees.

These are some of the options available to small businesses for accepting online payments. All of the providers have pros and cons but they will get you started selling your products. All you need to do is choose a third party service like PayPal. Once you have some experience with the online payment gateway you may want to apply for a merchant account.